Monthly Archives: October 2011
Apparently income inequality is the new cult of the left. And they intend upon exploiting it to their advantage. Never mind the fact that It makes the same sort of erroneous assumptions as does global warming: A) that there’s a perfect temperature for the earth and B) man is screwing it up.
Income inequality makes two such assumptions: A) economics is a zero sum game so when the rich get more the poor get less, B) income classes are static.
Finally, in the case of both, the solution is government intervention. In the case of global warming the solution is to tax us back into the stone age to prevent the production of CO2 and maintain whatever temperature target they’re gunning for. In the case of income inequality, the solution is government taxing the “rich” and redistributing their income to ensure the rich don’t get more than their “fair share”. That’s sort of like that perfect temperature I was talking about .. who gets to decide what is a “fair share?”
Of course it plays into the left’s love of class warfare. Such warfare allows the left, which seems to have an ingrained guilt about succeeding and being richer or better off than others, to use these issues to a) assuage that guilt and b) use government as an instrument of utopian change (social engineering).
One of the most attractive aspects of this nation’s founding was the fact that government was formed to fulfill and entirely different role than it had traditionally to that point. It was chartered to be an institution that protected the rights of the people who were the sovereigns and in charge. Government was to be a sort of “night watchman” who protected us from force and fraud both internally and externally. And to discharge those duties the government was given certainly powers to do so.
But never envisioned or entertained was the idea that government would intrude to such an extent as it has today. That’s because those who wrote the founding document understood what freedom and liberty meant. And they also realized that any intrusion by government in areas other than that of protecting rights actually meant violating rights. Certainly not the rights of all, but it must violate rights, such as that to property, to take from one and give to another under such flimsy pretexts such as those presented by income inequality and global warming.
Government intrusion and cronyism (both economic and political) are rampant now (and not just on the left). The system is horribly corrupted, the government far too intrusive and the left continues to try to change government’s focus from night watchman to Candyman.
Unfortunately, they seem to have had far more success than they should have or we wouldn’t be discussing this right now or noting the seriousness which one has to take these issues.
The level of intrusion and cronyism (both economic and political) will end up destroying this country. It is well on its way now. And all of it being done in the name of fairness, equality and compassion.
There is no fairness involved in taking something someone earned and giving it to someone who hasn’t earned it. There’s no equality involved in shackling one person to the needs of another. And it certainly isn’t compassionate to make someone dependent on another.
But that’s where the left wants to take us.
In this podcast, Bruce Michael, and Dale discuss college loans and baseball.
The direct link to the podcast can be found here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.
Very interesting survey concerning ObamaCare. Kaiser Family Foundation does a monthly tracking poll. Their October poll yielded some surprise results. Note that this comes as we have been learning more and more about the details of the ObamaCare law:
- After remaining roughly evenly split for most of the last year and a half, this month’s tracking poll found more of the public expressing negative views towards the law. In October, about half (51%) say they have an unfavorable view of the Patient Protection and Affordable Care Act (ACA), while 34 percent have a favorable view, a low point in Kaiser polls since the law was passed. While Democrats continue to be substantially more supportive of the law than independents or Republicans, the change in favorability this month was driven by waning enthusiasm for the law among Democrats, among whom the share with a favorable view dropped from nearly two-thirds in September to just over half (52%) in October.
- Americans are more than twice as likely this month to say the law won’t make much difference for them and their families as they are to say they’ll be better off under the law. Forty-four percent say health reform won’t make much difference to them personally, up from 34 percent in September. Meanwhile 18 percent say they and their families will be better off, down from 27 percent last month. (The share who thinks they’ll be worse off personally held steady at roughly three in ten, where it has been since the law passed in 2010.) Here, too, changes in views among Democrats helped shape the overall change.
That’s a bit of a sea-change on the Democratic side.
It’s also significant for another reason. It makes the case for repeal stronger. While Republicans have always been against it, that’s been fairly easy for Democrats to wave off. Indies are a little harder to wave off. But when other Democrats are less supportive of the law, to the point that fewer and fewer have an favorable view of the law, well that makes it increasingly harder for Democrats to justify keeping it.
Something is causing their support to erode and the GOP needs to figure out what it is and use it to make their case.
As election time nears, this is an issue they can use as a secondary one to the economy. It was unpopular when it passed. It has remained mostly unpopular and, with this sort of poll, we see the unpopularity expanding into Democratic ranks. It appears it is something the GOP could get majority consensus on.
Today’s economic statistical releases:
Personal income increased by 0.1% last month, while spending increased by 0.6%. Year-over-year income rose 4.4% while spending rose 5.3%. The core PCE price index was unchanged last month, and up 1.6% on a year-over-year basis.
Thanks to a slowdown in the growth of benefit costs, the Employment Cost Index rose far less than expected, 0.3%. ECI is up 2% on a year-over-year basis.
A little optimism is leaking into Consumer Sentiment, as it rose to 60.9 in the latest tally.
Yeah, I know, boring economics again, but its important stuff. This is where the crisis is and it is important to understand these stories as they come out.
The Washington Post trumpeted today that the Gross Domestic Product grew by 2.5% this past quarter. Yes, that is a decent number. But a) is it a number that will be revised upward or downward (because they’re always revised) and b) are there any clinkers out there we should be aware of, and finally c) is this the beginning of a trend or just a blip?
In answer to “a”, the “b” says down. So let’s get to “b”:
Real disposable personal income fell 1.7%, the biggest drop since the third quarter of 2009, economist Nigel Gault of IHS of Global Insight notes. Even so, consumer spending jumped 2.4%, a big factor in the overall GDP growth. That means consumers boosted their spending by saving less. The savings rate fell a percentage point to 4.1%, Commerce Department data show.
That trend can’t last indefinitely, economists warn. Consumers eventually will tap out their savings or put the brakes on spending. “Consumer spending only accelerated because the saving rate dropped by a full percentage point,” Mr. Gault wrote. “That’s not a solid foundation for growth.”
Economists are already wondering whether a plunge in consumer confidence will eventually translate into lower consumer spending. October data from the Conference Board this week showed that Americans’ confidence in the economy is lower than at any point since the depths of the recession.
So the good news is that consumer spending most likely drove the GDP numbers up this past quarter. However, it also appears, given the report, that it is unlikely that’s going to continue. That is a huge drop in real disposable income and tapping savings isn’t something one would expect to be a long-term trend. What we may have seen this quarter is consumer spending driven by the fact that a good percentage of consumers could hold out no longer on making some purchases. Additionally, those out of work and tapping savings can’t do that forever.
Which brings us to “c”. Trend or blip? Well, first my guess is the GDP will be revised downward. And, seeing how that’s been the case with all previous quarters, I think that’s unfortunately a pretty safe bet. And “c”?
Watch and listen. Schiff makes a lot of points we’ve been hitting for years. It is a fundamental misunderstanding of capitalism and what it is that drives a lot of the OWS supporters to focus on the wrong entities. Schiff has a lively discussion with them. Interestingly some agree and some simply won’t take the ideological blinders off. You’ll quickly identify who is who.
Today’s economic statistical releases:
The big number today is obviously the advance estimate for 3rd quarter GDP. The BEA reported that GDP increased at an annualized 2.5% rate. The top three contributors to GDP growth were personal consumption expenditures, nonresidential fixed investment, and exports. So despite a bit of gloom as the economy slipped during the 2nd quarter, GDP, along with several other series of statistics, are showing a rebound.
The Kansas City Fed manufacturing index rose to 6 in September, up from 3 last month. The increase was mainly concentrated in durable goods.
Sadly, the rest of today’s numbers are a bit less cheerful.
Initial claims for unemployment held basically steady, though still unpleasantly high, at 402,000. The 4-week moving average dropped to 403,000 from 405,500 last week.
The Bloomberg Consumer Comfort Index fell to -51.1 last week, from -48.4 the previous week. This week’s reading is the lowest in the past month.
Contract signings are very weak for existing home sales, which shows ongoing trouble for housing and construction. Pending sales fell -4.6% in September, with weakness in all geographic areas. Weak consumer confidence combined with tight credit conditions are weighing down the market.
Have you been following the latest gambit of our president? It’s time to pull the youth vote back to him with some candy. Taxpayer candy of course. In his latest “policy” swing, he’s offering a way out of student loans to … students with loans, of course.
And of course there’s the convenient lie – you can essentially get something for next to nothing. Go borrow money and the government will help you “satisfy” the loan after so many years if you do things like “public service”. Oh, and it will never cost you more than 10% of your salary … so go for it.
Wait, one more thing from the Candy Man as he addressed a crowd of college students at the University of Colorado’s Denver campus:
But, he added, “young guys, I need you involved, I need you active … I need you to get the word out.”
Of course that’s code for “hey, vote for me and I’ll solve all your student loan problems”. Cronyism at its finest and all without legislation. Wasn’t it the Democrats who said they feared the “executive President”. But I digress.
Here’s the basic truth:
But the colleges fees have to be paid somehow, even when repayments are stopped, said Burke. Sooner or later, this “will ultimately result in tax increases — in putting this on the backs of three-quarters of Americans who did not graduate from college.”
Working-class people will end up paying for middle-class graduates’ basket-weaving and women’s studies degrees, she said.
That’s right … these are government guaranteed loans. So they will be paid. The creditor doesn’t care who pays it. The student or the taxpayer. So what Obama is more than willing to do is to buy votes today, by executive order, for taxpayer bailouts of deadbeat students tomorrow.
Obama is “shifting the burden of paying for college to all of those Americans who did not graduate from college — the waitresses, construction workers, mechanics — and that should infuriate the taxpayers who worked hard to pay off their loans, who decided to live a modest lifestyle to pay off their loans,” said Lindsey Burke, an analyst at the Heritage Foundation.
Obama’s policy is also widening the class division between working-class Americans and those with college credentials, said Matthew Denhart, a researcher at the Center for College Affordability and Productivity in Washington, D.C.
In case you were wondering, Colorado is a swing state and one in which polls show the Candy Man below 50%.
Crony Capitalism isn’t the only form of cronyism in the world as Barack Obama (and politicians of all stripes) have been proving for years. And all funded by your money.
That’s a quote
from attributed to Abraham Lincoln* as delivered by Richard Epstein in his discussion of economic inequality (a meme that is all the rage right now). Interestingly enough, this interview was conducted and broadcast by PBS (as tree hugging sister notes “I’m sure whoever’s idea it was has been sacked. Along with all the llama trainers”).
In any event, this is as good a retort to the #OWS nonsense as you’ll likely find. Enjoy (HT: Insty):
ADDED: Although Epstein doesn’t say it explicitly, essentially he describes “economic inequality” as a benign effect, rather than a malignant cause. Understanding the difference leads to understanding why allowing for the greatest number of opportunities works better at increasing everyone’s wealth instead of trying to equalize outcomes.
* Thanks to DWPittelli for pointing out this misattribution in the comments (“It was the Reverend William John Henry Boetcker (1873–1962) who wrote “you cannot help the poor by destroying the rich” and 9 other related aphorisms in 1916. A printing error in 1942 led to the confusion between some Lincoln quotes and these Boetcker quotes.”).
For years there’s been a concerted effort to get handguns banned in the US (not to mention the best efforts of the DoJ with “Fast and Furious” to aid that effort). And war of words has been fierce, the propaganda unrelenting and the hope eternal that the effort would succeed.
Well, it looks like the American people have looked at both sides of the argument and decided, at least for now, that those wishing to ban handguns have no case:
A record-low 26% of Americans favor a legal ban on the possession of handguns in the United States other than by police and other authorized people. When Gallup first asked Americans this question in 1959, 60% favored banning handguns. But since 1975, the majority of Americans have opposed such a measure, with opposition around 70% in recent years.
And there’s more:
For the first time, Gallup finds greater opposition to than support for a ban on semiautomatic guns or assault rifles, 53% to 43%. In the initial asking of this question in 1996, the numbers were nearly reversed, with 57% for and 42% against an assault rifle ban. Congress passed such a ban in 1994, but the law expired when Congress did not act to renew it in 2004. Around the time the law expired, Americans were about evenly divided in their views.
Why? Because, I think, concealed carry laws haven’t brought the mayhem that the advocates claimed they would. In fact, quite the opposite. And its always nice for the bad guys who may be thinking about taking you on for whatever evil reason to have to guess. Deterrence is the best form of self-defense.
Secondly, it may sound trite, but people have accepted the cliché “guns don’t kill people, people do” as a truth. It isn’t the tool that’s the problem, it’s the person using the tool.
Finally, I also believe most Americans have finally realized that self-protection and self-defense are inherent responsibilities they must discharge and can’t outsource to government. The best tool for that, ye olde equalizer, is a hand gun responsibly used.
And then, of course there’s that pesky Constitutional amendment and all.
My guess is that the dream of gun confiscation is pretty much a dead issue for right now. Obviously that doesn’t mean it won’t again arise or, like health care, a certain party won’t simply ram something through Congress if they ever get the chance again. But according to this poll, American’s don’t support it now and most likely wouldn’t support it if that was tried.